Tuesday, August 12, 2014

Reading Capital... in the 21st Century (part 9 of x)

A passing reference on page 504 to August Bebel and Eduard Bernstein reminds me, apropos of my last post, that I should review the role of taxation in the SPD revisionism debate. Not that century old debates among Germans are or ought to be decisive for socialist strategy today, but any controversy in which Rosa Luxemburg was a participant is sure to clarify one's thoughts.

One Piketty subchapter heading that summarizes the contents well: "Confiscatory Taxation of Excessive Incomes: An American Invention". It seems paradoxical that, of the wealthy countries, the one in which organized socialist movements and political parties have been weakest is the one that pioneered in that area. A political historian would do well to review the discursive environment, during the New Deal and World War II, in which that apparent paradox arose.

"In 2012, the total budget of the Egyptian ministry of education for all primary, middle, and secondary schools and universities in a country of 85 million was less than $5 billion. A few hundred kilometers to the east, Saudi Arabia and its 20 million citizens enjoyed oil revenues of $300 billion, while Qatar and its 300,000 Qataris take in more than $100 billion annually. Meanwhile, the international community wonders if it ought to extend a loan of a few billion dollars to Egypt or wait until the country increases, as promised, its tax on carbonated drinks and cigarettes." (538)

Since then, a democratically elected president has been overthrown in Egypt and replaced with the military oligarchy that held power before the overthrow of Mubarak. The "international community" has gotten what it wanted. Just another reminder that the whole arbitrary, ridiculous system of postcolonial states in the Middle East needs to be destroyed, and the IMF and World Bank along with them.

If nothing else, I hope Piketty succeeds in destroying the Keynesian hard-on for public debt. It should be obvious that "it is normally preferable to tax the wealthy than borrow from them," (540) but somehow when Richard Wolff points this out he gets dismissed as a radical wacko.

There's another sighting of Piketty's Straw Marx on page 565, where he once again refers (falsifiably) to Marx "implicity assum[ing] zero demographic and productivity growth". When I first read that claim I thought, surely that can't be all there is to his argument against the tendency of the rate of profit to fall. Surely this guy is smart enough to have a more sophisticated up his sleeve. No, he did not. When I hypothesized earlier that someone could write a book about Piketty's Straw Marx, I was wrong. At most, it should be a fairly concise review article suitable for publication in a journal like Historical Materialism.

Even more absurd is that, what he wields against the falling rate of profit is his own law, β = s/g, which he characterizes early on as "asymptotic". For a reader familiar with Marx's presentation of the falling rate of profit tendency, the concept of an "asymptotic law" is familiar, as that is exactly what Marx's law is. Piketty, who insists that readers indulge his own asymptotic law, refuses, for obviously polemical reasons, to extend the benefit of a similar doubt to Marx.

There is one historical fact, though, that makes things more awkward for Marxists, namely, the political economy of the Soviet Union and allied states: "the state claimed to serve the common good by accumulating unlimited industrial capital and ever-increasing numbers of machines: no one really knew where the planners thought accumulation should end." The statified capitalism of the Soviet Union was the historical incarnation of Piketty's Straw Marx, a golem fashioned from blood and steel.

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